hoth-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from:

Commission File Number: 001-38803

Hoth Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Nevada		82-1553794
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

720 Monroe Street, Suite E514,

Hoboken, NJ

07030

(Address of principal executive offices)

(Zip Code)

(866) 239-7459

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value		HOTH		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the issuer’s common stock, $0.0001 par value per share, outstanding at May 14, 2026 was 19,127,643.

Table of Contents

		Page
PART I - FINANCIAL INFORMATION		1
ITEM 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	27
ITEM 4.	Controls and Procedures	27

PART II - OTHER INFORMATION		28
ITEM 1.	Legal Proceedings	28
ITEM 1A.	Risk Factors	28
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
ITEM 3.	Defaults Upon Senior Securities	28
ITEM 5.	Other Information	28
ITEM 6.	Exhibits	29
SIGNATURES		30

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

This Quarterly Report on Form 10-Q contains certain forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements in this Quarterly Report on Form 10-Q about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “believes,” “will,” “expects,” “anticipates,” “estimates,” “predicts,” “potential,” “continues” “intends,” “plans” and “would” or the negative of these terms or other comparable terminology. For example, statements concerning financial condition, possible or assumed future results of operations, growth opportunities, industry ranking, plans and objectives of management, markets for our common stock and future management and organizational structure are all forward-looking statements. Our forward-looking statements are based on a series of expectations, assumptions, estimates and projections about our company, are not guarantees of future results or performance and involve substantial risks and uncertainty. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from any results, levels of activity, performance or achievements expressed or implied by any forward-looking statement. We may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements. Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed in this Quarterly Report on Form 10-Q. Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including the risks and uncertainties inherent in our statements regarding:

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our business strategies;

●

the timing of regulatory submissions;

●

our ability to obtain and maintain regulatory approval of our existing product candidates and any other product candidates we may develop, and the labeling under any approval we may obtain;

●

risks relating to the timing and costs of clinical trials and the timing and costs of other expenses;

●

risks related to market acceptance of our products;

●

the ultimate impact of any public health crisis on our business, our clinical trials, our research programs, healthcare systems or the global economy as a whole;

●

intellectual property risks;

●

risks associated with our reliance on third-party organizations;

●

our competitive position;

●

our industry environment;

●

our anticipated financial and operating results, including anticipated sources of revenues;

●

assumptions regarding the size of the available market, benefits of our products, product pricing and timing of product launches;

●

management’s expectation with respect to future acquisitions;

●

statements regarding our goals, intentions, plans and expectations, including the introduction of new products and markets;

●

general business and economic conditions, such as inflationary pressures, geopolitical conditions and tariffs and other trade barriers;

●

our cash needs and financing plans.

All of our forward-looking statements are as of the date of this Quarterly Report on Form 10-Q only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report on Form 10-Q or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”) could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report on Form 10-Q, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report on Form 10-Q that modify or impact any of the forward-looking statements contained in this Quarterly Report on Form 10-Q will be deemed to modify or supersede such statements in this Quarterly Report on Form 10-Q.

This Quarterly Report on Form 10-Q may include market data and certain industry data and forecasts, which we may obtain from internal company surveys, market research, consultant surveys, publicly available information, reports of governmental agencies and industry publications, articles and surveys. Industry surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. While we believe that such studies and publications are reliable, we have not independently verified market and industry data from third-party sources.

iii

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2026			2025
	(Unaudited)
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	4,047,198		$	6,247,467
Prepaid expenses and other current assets		753,349			366,548
Crypto assets, at fair value		-			191,367
Deferred offering costs		57,171			57,171
Total Current Assets		4,857,718			6,862,553

NON-CURRENT ASSETS:
Prepaid expenses and other assets, net of current portion		699,420			699,420
Operating lease right-of-use asset, net		-			4,652
Investment in joint ventures at fair value		36,819			36,819
Total Non-Current Assets		736,239			740,891

Total Assets	$	5,593,957		$	7,603,444

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable	$	1,197,999		$	823,674
Accrued expenses		234,592			623,323
Operating lease liability, current portion		-			5,678
Total Current Liabilities		1,432,591			1,452,675

Total Liabilities		1,432,591			1,452,675

Commitments and Contingencies (Note 8)

STOCKHOLDERS’ EQUITY:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; 3,000,000 shares undesignated; 0 shares issued and outstanding as of March 31, 2026 and December 31, 2025		-			-
Series A Convertible Preferred Stock, $0.0001 par value; 5,000,000 shares designated; 0 shares issued and outstanding as of March 31, 2026 and December 31, 2025		-			-
Series B Preferred Stock, $0.0001 par value; 2,000,000 shares designated; 0 shares issued and outstanding as of March 31, 2026 and December 31, 2025		-			-
Common stock, $0.0001 par value; 50,000,000 shares authorized; 16,270,499 and 15,514,312 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		1,627			1,551
Additional paid-in capital		79,719,138			79,017,730
Accumulated deficit		(75,571,808	)		(72,879,343	)
Accumulated other comprehensive income - foreign currency translation		12,409			10,831
Total Stockholders’ Equity		4,161,366			6,150,769

Total Liabilities and Stockholders’ Equity	$	5,593,957		$	7,603,444

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended
	March 31,
	2026			2025

NET REVENUES	$	-		$	-

OPERATING COSTS AND EXPENSES:
Research and development expense		1,519,002			1,958,602
General and administrative expenses		1,129,447			1,517,415

Total operating expenses		2,648,449			3,476,017

LOSS FROM OPERATIONS		(2,648,449	)		(3,476,017	)

OTHER INCOME (EXPENSES), NET:
Realized loss on crypto assets		(44,165	)		-
Dividend and interest income		149			181

Total other income (expenses), net		(44,016	)		181

NET LOSS	$	(2,692,465	)	$	(3,475,836	)

COMPREHENSIVE LOSS:
Net loss	$	(2,692,465	)	$	(3,475,836	)

Other comprehensive income (loss):
Foreign currency translation adjustment		1,578			(497	)

Total comprehensive loss	$	(2,690,887	)	$	(3,476,333	)

NET LOSS PER SHARE OF COMMON STOCK
Basic and diluted	$	(0.17	)	$	(0.27	)

WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:
Basic and diluted		15,792,337			12,727,581

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited)

					Additional					Accumulated Other		Total
	Common Stock				Paid-in		Accumulated			Comprehensive		Stockholders’
	Shares		Amount		Capital		Deficit			Income		Equity

Balance, December 31, 2025		15,514,312	$	1,551	$	79,017,730	$	(72,879,343	)	$	10,831	$	6,150,769
Common stock issued for cash, net		756,187		76		701,408		-			-		701,484
Cumulative translation adjustment- foreign currency translation		-		-		-		-			1,578		1,578
Net loss		-		-		-		(2,692,465	)		-		(2,692,465	)

Balance, March 31, 2026 (unaudited)		16,270,499	$	1,627	$	79,719,138	$	(75,571,808	)	$	12,409	$	4,161,366

					Additional					Accumulated Other			Total
	Common Stock				Paid-in		Accumulated			Comprehensive			Stockholders’
	Shares		Amount		Capital		Deficit			Income (Loss)			Equity

Balance, December 31, 2024		8,042,747	$	804	$	67,279,033	$	(60,410,041	)	$	9,063		$	6,878,859
Common shares issued for exercise of warrants		3,750,000		375		5,624,625		-			-			5,625,000
Stock-based compensation		-		-		219,929		-			-			219,929
Common stock issued for cash, net		927,968		93		1,441,871		-			-			1,441,964
Common stock issued for patent		450,000		45		850,455		-			-			850,500
Cumulative translation adjustment - foreign currency translation		-		-		-		-			(497	)		(497	)
Net loss		-		-		-		(3,475,836	)		-			(3,475,836	)

Balance, March 31, 2025 (unaudited)		13,170,715	$	1,317	$	75,415,913	$	(63,885,877	)	$	8,566		$	11,539,919

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended
	March 31,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,692,465	)	$	(3,475,836	)
Adjustments to reconcile net loss to net cash used in operating activities:
Research and development-acquired patent, expensed		-			850,500
Stock-based compensation		-			219,929
Lease costs		(1,026	)		4,354
Realized loss on crypto assets		44,165			-
Change in operating assets and liabilities:
Prepaid expenses		(386,801	)		(370,577	)
Accounts payable and accrued expenses		(14,406	)		(16,395	)

NET CASH USED IN OPERATING ACTIVITIES		(3,050,533	)		(2,788,025	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of crypto assets		147,202			-

NET CASH PROVIDED BY INVESTING ACTIVITIES		147,202			-

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net of offering costs		701,484			1,441,964
Proceeds from exercise of warrants		-			5,625,000

NET CASH PROVIDED BY FINANCING ACTIVITIES		701,484			7,066,964

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(2,201,847	)		4,278,939

Effect of exchange rate changes on cash and cash equivalents		1,578			(497	)

CASH AND CASH EQUIVALENTS - beginning of period		6,247,467			7,038,923

CASH AND CASH EQUIVALENTS - end of period	$	4,047,198		$	11,317,365

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

NOTE 1 – Organization and Description of Business Operations

Hoth Therapeutics, Inc. (together with its wholly-owned subsidiaries, merveille.ai, Rocket One Inc. and Hoth Therapeutics Australia Pty Ltd, the “Company”) was incorporated under the laws of the State of Nevada on May 16, 2017. The Company is a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. The Company is focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); and (iii) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). The Company also has assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for obesity, and obesity-related diseases and conditions (HT-VA).

Going Concern Considerations

Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - Going Concern, requires management to evaluate the Company’s ability to continue as a going concern one year beyond the filing date of the given financial statements. This evaluation requires management to perform two steps. First, management must evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern. Second, if management concludes that substantial doubt is raised, management is required to consider whether it has plans in place to alleviate that doubt. Disclosures in the notes to the unaudited condensed consolidated financial statements are required if management concludes that substantial doubt exists or that its plans alleviate the substantial doubt that was raised.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital to fund its research and development (“R&D”) activities and meet its obligations on a timely basis. The Company has incurred losses and generated negative cash flows from operations since its inception. On March 31, 2026, the Company had an accumulated deficit of $75,571,808, cash and cash equivalents of $4,047,198, and working capital of $3,425,127. Net cash used in operating activities was $3,050,000 and $2,788,000 for the three months ended March 31, 2026 and 2025, respectively. We incurred net losses of approximately $2,692,000 and $3,476,000 for the three months ended March, 2026 and 2025, respectively. The Company has funded its operations from proceeds from the sale of equity securities. The Company will require significant additional capital to make the investments it needs to execute its longer-term business plan. The Company’s ability to successfully raise sufficient funds through the sale of debt or equity securities when needed is subject to many risks and uncertainties and, even if it were successful, future equity issuances may result in dilution to its existing shareholders and future debt securities may contain covenants that limit the Company’s operations or ability to enter into certain transactions.

The Company does not believe its current cash is sufficient to fund operations for the next 12 months from the issuance date of these unaudited condensed consolidated financial statements and the Company will need to raise additional funding, through strategic relationships, public or private equity or debt financings, grants or other arrangements, to develop and seek regulatory approvals for the Company’s current and future product candidates. If such funding is not available, or not available on terms acceptable to the Company, the Company’s current development plan and plans for expansion of its general and administrative infrastructure may be curtailed. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these consolidated financial statements are issued. These unaudited condensed consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern.

On November 8, 2024, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which the Company could offer and sell shares of its common stock having an aggregate sales price of up to $2,700,000 through Wainwright as the sales agent (see Note 7). On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $5,000,000 pursuant to a prospectus supplement dated February 7, 2025. On November 13, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $2,439,256 pursuant to a prospectus supplement dated November 13, 2025 for a current offering up to $4,821,200. On April 16, 2026, the amount that the Company could offer and sell pursuant to the ATM Agreement was updated pursuant to a prospectus supplement dated April 16, 2026 for a current offering up to approximately $1,555,000. During the three months ended March 31, 2026, the Company sold 756,187 shares of its common stock for net proceeds of $701,484, or $0.0393 per share.

On April 1, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to sell to such investors 2,857,144 shares of common stock of the Company at a purchase price of $0.70 per share of common stock. For each share of common stock purchased by the investors, the Company, in a private placement pursuant to the Purchase Agreement, concurrently issued to such investors an unregistered warrant (each a “Warrant” and, collectively, the “Warrants”) to purchase one share of common stock at an exercise price of $0.85 per share. The Warrants are exercisable six months from the date of issuance (the “Initial Exercise Date”) for a period of five years from the Initial Exercise Date. Gross proceeds from the offering were approximately $2,000,000, and the Company received net proceeds of $1,611,879, after deducting placement agent’s fees and other offering expenses paid by the Company of $388,121. Additionally, in connection with the offering, the Company issued placement agent warrants to the designees of the placement agent, Wainwright, to purchase up to 142,857 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants are immediately exercisable at an exercise price of $0.875 per share and expire on April 1, 2031. The Company intends to use the net proceeds from the Offering for working capital and other general corporate purposes (see Note 9 – Subsequent Events).

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

NOTE 2 – Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company’s annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. These unaudited condensed consolidated financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on March 27, 2026.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company’s wholly-owned subsidiaries, merveille.ai, which was incorporated under the laws of Nevada on October 4, 2023, Rocket One Inc., which was incorporated under the laws of Nevada on April 22, 2026 and Hoth Therapeutics Australia Pty Ltd, which was incorporated under the laws of the State of Victoria in Australia on June 5, 2019. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of expenses during the reporting periods. The most significant estimates in the Company’s unaudited condensed consolidated financial statements relate to stock-based compensation, the valuation of common stock issued for research and development-acquired patent, and the valuation allowance of deferred tax assets resulting from net operating losses. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations may be affected.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. Cash and cash equivalents consist of bank accounts and highly liquid money funds and totaled $4,047,198 and $6,247,467 as of March 31, 2026 and December 31, 2025, respectively. Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits at the three financial institutions the Company utilizes for its banking requirements. The Company’s foreign bank account is not subject to Federal Deposit Insurance Corporation insurance. Cash held in foreign bank accounts totaled approximately $97,000 and $96,000 as of March 31, 2026 and December 31, 2025, respectively.

Concentrations of Credit Risk and Off-Balance Sheet Risk

The Company has significant cash balances at financial institutions which, throughout the year, regularly exceed the federally insured limit of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements (“ASC 820”), provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The fair value of the Company’s assets and liabilities, which would qualify as financial instruments under ASC 820, approximates the carrying amounts represented in the Company’s condensed consolidated balance sheets, primarily due to their short-term nature.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

	Level 1:	Quoted prices in active markets for identical assets or liabilities.

	Level 2:	Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

	Level 3:	Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. During the three months ended March 31, 2026 and 2025, there were no changes in valuation techniques or transfers between Level 1, Level 2, and Level 3.

Leases

The Company determines if an arrangement is a lease at inception and classifies its leases at commencement. Operating leases are presented as right-of-use (“ROU”) assets and the corresponding lease liabilities are included in operating lease liability, current and lease liability, on the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset, and lease liabilities represent the Company’s obligation to make lease payments in exchange for the ability to use the asset for the duration of the lease term.

The Company may have lease agreements which contain both lease and non-lease components, which it has elected to account for as a single lease component. As such, minimum lease payments include fixed payments for non-lease components within a lease agreement but exclude variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. Certain of the leases may contain an option to extend the term of the lease. The option to extend a lease is included in the lease term only when it is reasonably certain that the Company will elect that option. Additionally, the Company does not record ROU assets or lease liabilities for short-term leases that have a term of twelve months or less at lease commencement.

ROU assets and lease liabilities are recognized at the commencement date and determined using the present value of the future minimum lease payments over the lease term. The Company uses an incremental borrowing rate based on an estimated rate of interest for collateralized borrowing since the Company’s leases do not include an implicit interest rate. The estimated incremental borrowing rate considers market data, actual lease economic environment, and the lease term at commencement date.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Investment in Joint Ventures

Ownership interests in entities for which the Company has significant influence that are not consolidated are accounted for as equity method investments. SEC Staff Announcement: Accounting for Limited Partnership Investments (codified in ASC 323-30-S99-1) guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” The SEC staff’s position is that investments in limited partnerships of greater than 3% to 5% are considered more than minor and, therefore, should be accounted for using the equity method or fair value option. Investments accounted for using the equity method may be reported on a lag up to three months if financial statements of the investee are not available in sufficient time for the investor to apply the equity method as of the current reporting date. The determination of whether an investee’s results are recorded on a lag is made on an investment-by-investment basis. This investment in joint ventures is further described in Note 5 of these unaudited condensed consolidated financial statements.

Digital Assets, at Fair Value

The Company’s digital assets primarily included Bitcoin (“BTC”), Ethereum (“ETH”) and Solana (“SOL”), which are actively traded on public exchanges. The Company distinguishes between digital assets which fall within the scope of ASC 350-60 and those which do not. The Company refers to digital assets which fall within the scope of ASC 350-60 (e.g., BTC) as “crypto assets.” Digital assets which do not fall within the scope of ASC 350-60, Accounting for and Disclosure of Crypto Assets, are referred to as “digital intangible assets.” As of March 31, 2026 and December 31, 2025, the Company did not own any digital intangible assets that did not fall within the scope of ASC 350-60.

Crypto assets are recorded at fair value in accordance with ASC 820, Fair Value Measurement. Changes in fair value are recognized in the Company’s unaudited condensed consolidated statements of operations within “other income (expenses), net” for the period in which they occur.

Digital assets are classified on the condensed consolidated balance sheets based on management’s intent and the expected period of use or sale:

●

Current assets: Digital assets held for trading or intended to be sold within 12 months are classified as current assets.

●

Non-current assets: Digital assets held for investment or long-term strategic purposes are classified as non-current assets.

The fair value of each cryptocurrency holding is based on the closing market price on the reporting date.

As of December 31, 2025, the Company held $191,367 of crypto assets comprised of BTC, ETH and SOL, which are in the scope of ASC 350-60 at fair value. In determining the fair value of the crypto assets in accordance with ASC 820, the Company utilizes Coinbase as the principal market. The Company uses a first-in, first-out methodology to assign costs to crypto assets. Sales and purchases of crypto assets are reflected as cash flows from investing activities in the unaudited condensed consolidated statements of cash flows. As of March 31, 2026, the Company did not hold any crypto assets.

Research and Development Costs

Research and development costs, including acquired in-process research and development expenses for which there is no alternative future use, are expensed as incurred. Advance payments for goods and services that will be used in future research and development activities are accrued and then expensed when the activity has been performed or when the goods have been received rather than when the payment is made.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Stock-Based Compensation

The Company accounts for stock-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company’s long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company’s stock at the date of grant and expire up to ten years from the date of grant. Options are generally issued fully vested. The Company accounts for forfeited awards as they occur.

The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment.

Expected Term - The expected term of options represents the period that the Company’s stock-based awards are expected to be outstanding based on the simplified method, which is the half-life from vesting to the end of its contractual term.

Expected Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Expected Dividend - The Company has never declared or paid any cash dividends on its common shares and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

The Company grants restricted stock awards under its equity incentive plan. Restricted stock awards are granted to employees and non-employees. The restricted stock awards are measured based on the grant-date fair value. In general, the restricted stock awards vest over a service period of zero to three years. Stock-based compensation expense is generally recognized based on the straight-line basis over the requisite service period and forfeitures are accounted for as they occur.

The Company has issued warrants to non-employees. The warrants are measured based on the grant-date fair value. In general, the warrants vest over a term of zero to ten years. Stock-based compensation expense is generally recognized based on the straight-line basis over the vesting term.

Income Taxes

Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. With the passing of this tax legislation, the most notable corporate tax issue that impacts the Company is the change to Internal Revenue Code (“IRC”) §174. Since 2022, the Company has been required to capitalize U.S. and foreign research and development expenditures in accordance with IRC §174 and amortize those costs over 5 years for U.S. costs and 15 years for foreign costs. The new legislation no longer requires U.S. research and development costs to be capitalized; however, foreign costs will continue to be capitalized and amortized over 15 years. U.S. costs that were capitalized in tax years 2022 through 2024 can be expensed. Pursuant to the OBBBA’s transition rules, in 2025, the Company elected to expense all unamortized domestic research and experimental (“R&E”) expenditures previously capitalized between 2022 and 2024. The Company continues to evaluate various elections available to the Company under OBBBA related to IRC §174 capitalized R&E expenditures. The effect of expensing all unamortized domestic R&E expenditures was to decrease the Company’s deferred tax assets and decrease the related valuation allowance.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Net Loss per Share

Net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Since the Company had a net loss in the periods presented, basic and diluted net loss per share of common stock are the same. The following were excluded from the computation of diluted shares outstanding due to the losses for each period presented, as they would have had an anti-dilutive impact on the Company’s net loss:

	Three Months Ended March 31,
Potentially dilutive securities	2026		2025
Warrants		1,683,820		1,444,389
Options		1,260,362		1,260,362
Total		2,944,182		2,704,751

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For issued warrants that do not meet all the criteria for equity classification, the warrants are classified as liability and are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Comprehensive Loss

Comprehensive loss is composed of net loss and other comprehensive income (loss). During the three months ended March 31, 2026 and 2025, other comprehensive income (loss) was attributable to foreign currency translation adjustments.

Foreign Currency

The reporting currency of the Company is the U.S. dollar. For the Company’s subsidiary with non-U.S. dollar functional currencies, assets and liabilities are translated into U.S. dollars at period-end exchange rates. Revenue and expenses are translated at the average exchange rates during the period. Equity transactions are translated using historical exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income – foreign currency translation as a component of stockholders’ equity. Foreign currency translation adjustments arising from differences in exchange rates from period to period are recorded within “Accumulated other comprehensive income – foreign currency translation” in the condensed consolidated balance sheets.

Segment Reporting

On January 1, 2024, the Company adopted FASB ASU 2023-07, Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements. The Company operates as a single operating segment as a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. In accordance with ASC 280, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company and decides how to allocate resources based on loss from operations, managing cash flows and evaluating research and development and general and administrative expenses. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similarities in economic characteristics such as nature of services and procurement processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying notes to unaudited condensed consolidated financial statements.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Recent Accounting Pronouncements

The Company adopted ASU 2023-09, Improvements to Income Tax Disclosures, during the year ended December 31, 2025 using a retrospective approach. The ASU requires greater disaggregation of information about a reporting entity’s effective tax rate reconciliation and information on income taxes paid. The ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. The ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including, but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on its unaudited condensed consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements, to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 and early adoption is permitted. The amendments in ASU 2025-11 can be applied either prospectively or retrospectively to any or all prior periods presented in the unaudited condensed consolidated financial statements. The Company is currently evaluating the disclosure impact that ASU 2025-11 may have on its financial statement presentation and disclosures.

Currently, management does not believe that any other recently issued, but not yet effective accounting pronouncements, if currently adopted, would have a material impact on the Company’s unaudited condensed consolidated financial statements.

NOTE 3 – Crypto Assets, at Fair Value

As of March 31, 2026, the Company held no crypto assets.

The following table sets forth the units held, cost basis, and fair value of crypto assets held, as shown on the condensed consolidated balance sheet as of December 31, 2025:

	Classification	Units Held		Cost Basis		Fair Value at December 31, 2025
Balance, December 31, 2025
BTC (Bitcoin)	Current		0.85673339	$	100,000	$	74,966
ETH (Ethereum)	Current		21.96726563		100,000		65,176
SOL (Solana)	Current		411.62365256		100,000		51,225
Total				$	300,000	$	191,367

Cost basis is equal to the cost of the crypto assets plus transaction fees, if any, at the time of purchase or upon receipt. Fair value represents the quoted crypto asset prices within the crypto assets principal market at the time of measurement.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

The following table represents a reconciliation of crypto assets held:

	For the Three Months Ended March 31, 2026
Fair Value, December 31, 2025	$	191,367
Crypto units sold, at fair value		(147,202	)
Realized loss		(44,165	)
Fair Value, March 31, 2026	$	-

NOTE 4 – License and Patent Agreements

The following summarizes the Company’s research and development expenses for licenses and patents acquired (including stock-based compensation) during the three months ended March 31, 2026 and 2025:

	For the Three Months Ended March 31,
	2026		2025
The George Washington University	$	-	$	1,250
North Carolina State University		-		937
University of Cincinnati		-		625
Patent applications acquired		-		1,250,500
	$	-	$	1,253,312

The George Washington University

During the three months ended March 31, 2026 and 2025, the Company recorded expenses of $0 and $1,250, respectively, related to license fees pursuant to the patent license agreement with The George Washington University (“GW”) dated February 1, 2020 and the patent license agreement with GW dated August 7, 2020.

North Carolina State University

During the three months ended March 31, 2026 and 2025, the Company recorded expenses of $0 and $937, respectively, for license fees associated with the license agreement by and between the Company and North Carolina State University dated February 25, 2021.

Chelexa Biosciences, Inc. and the University of Cincinnati

During the three months ended March 31, 2026 and 2025, the Company recognized expenses of $0 and $625, respectively, for license fees associated with the Assignment and Assumption Agreement by and between the Company and Chelexa Biosciences, Inc. dated May 14, 2020.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Patent Application Acquisition Agreement

On January 13, 2025, the Company entered into a Patent Application Acquisition Agreement with Med30, LLC (the “Seller”), whereby the Seller sold, conveyed, assigned and transferred to the Company all of Seller’s right, title, and interest in and to certain patent applications and associated rights, subject to the terms and conditions set forth in such agreement for a cash payment of $400,000 and the issuance of 450,000 shares of the Company’s common stock with a fair value of $850,500 for an aggregate purchase price of $1,250,500. These common shares were valued at $850,500, or $1.89 per share, on the measurement date based on the closing price of the Company’s common stock. For asset acquisitions, in-process research and development (“IPRD”) is expensed immediately unless there is an alternative future use. The patent applications acquired do not constitute a business, as defined under ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business (such when there is no substantive process in the acquired entity). The acquired IPRD intangible asset will be used in research and development projects which have been determined to not have alternative future use at the acquisition date and was expensed immediately. Accordingly, during the three months ended March 31, 2026 and 2025, the Company recorded $0 and $1,250,500 in research and development expenses, respectively.

NOTE 5 – Fair Value of Financial Assets and Liabilities

The following tables present the Company’s assets and liabilities that are measured at fair value on March 31, 2026 and December 31, 2025:

	Fair value measured on March 31, 2026
	Total at March 31, 2026		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Investment in joint ventures	$	36,819	$	—	$	—	$	36,819

	Fair value measured on December 31, 2025
	Total at December 31, 2025		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Crypto assets	$	191,367	$	191,367	$	—	$	—
Investment in joint ventures	$	36,819	$	—	$	—	$	36,819

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Level 3 Measurement

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial assets that are measured at fair value on a recurring basis for the three months ended March 31, 2026 and 2025:

Investment in joint venture for the three months ended March 31, 2026 and 2025

	For the Three Months Ended March 31,
	2026		2025
Investment in joint ventures at fair value – beginning of period	$	36,819	$	36,819
Change in fair value of investment in joint ventures		-		-
Investment in joint ventures at fair value – end of period	$	36,819	$	36,819

Investment in Joint Ventures

The Company has elected to measure the investment in joint ventures using the fair value option at each reporting date. Under the fair value option, bifurcation of an embedded derivative is not necessary, and all related gains and losses on the host contract and derivative due to change in the fair value will be reflected in other income (expenses), net in the unaudited condensed consolidated statements of operations and comprehensive loss.

The value at which the Company’s investment in joint ventures is carried on its books is adjusted to estimated fair value at the end of each quarter, taking into account general economic and stock market conditions and those characteristics specific to the underlying investments.

Investment in Zylö Therapeutics

In connection with the Company’s March 2020 underwritten public offering of shares of its common stock, on May 4, 2020, the Company purchased 120,000 shares of Zylö Therapeutics (“Zylö”) Class B common stock for $60,000. On December 8, 2021, the Company entered into a third amendment (the “Zylö Amendment”) to the Exclusive Sublicense Agreement with Zylö originally dated August 19, 2019 (as amended, the “Exclusive Sublicense Agreement”), pursuant to which the Company licensed its novel cannabinoid therapeutic, HT-005 for lupus patients, back to Zylö. Pursuant to the Zylö Amendment, on December 6, 2021, Zylö issued the Company 100,000 shares of its Class B common stock. In addition, pursuant to the Zylö Amendment, within 90 days following a sale by Zylö of all of its assets and rights related to HT-005 to a third-party (a “Sale”), Zylö shall pay the Company a low single digit percent of the net proceeds received by it attributable to HT-005 in the United States and Canada and their respective territories (collectively, the “Territory”) for the purposes of therapeutic uses related to lupus in humans (the “Field”). After the Sale, any and all rights of the Company pursuant to the Exclusive Sublicense Agreement, including all amendments thereto, shall terminate. Furthermore, pursuant to the Zylö Amendment, following the date of the first commercial sale of HT-005 in the Territory, in the Field, Zylö shall pay the Company (i) a low single digit percent of the Net Sales (as defined in the Exclusive Sublicense Agreement) of HT-005 in the event HT-005 is sold in the Territory and (ii) a low double digit percent of any royalty that Zylö receives through the sublicense to a third-party based on Net Sales of HT-005 in the Territory which payments shall continue in each country in the Territory until expiration of the last-to-expire Valid Claim (as defined in the Exclusive Sublicense Agreement). Zylö conducted a 409A valuation of their Class B common stock in February 2024, and as of March 31, 2026 and December 31, 2025, valued its 220,000 Zylö shares at $36,740, or at a price at $0.167 and $0.167 per share, respectively. This value was ratified by Zylö’s board of directors in February 2024.

On February 23, 2024, the Company acquired 22,000 shares of Class B common stock of Atticus Pharma, a subsidiary of Zylö Therapeutics, based upon a 1-for-10 ratio of current shares and was instructed, on July 3, 2024, that the 409A valuation of the shares was $79, or $0.0036 per share, pursuant to the February 2024 valuation ratified by Zylö’s board of directors.

On September 23, 2025, the Company received 110,000 shares of Class N common stock of Finch Pharma, a subsidiary of Zylö Therapeutics, based upon a 1-for-2 ratio of current shares and was instructed, on January 26, 2026, that a 409A valuation of $0.036 on each Class C common stock was done on September 23, 2025. Given that these shares have voting rights and the Class N common stock owned by the Company do not, management reduced the value to $0.034 per share of Class N common stock, reflecting the 3-5% premium typically attributed to voting rights, valuing the shares at $3,740. The Finch Pharma shares were received for no consideration, and accordingly, the Company did not increase its investment in Zylö for such shares.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

The valuations reflect a probability-weighted present value of expected future investment returns considering certain possible outcomes and the rights of each class of Zylö’s, Atticus Pharma’s, and Finch’s equity. The future values of the common stock under the various outcomes are discounted back to the valuation date at a risk-adjusted discount rate and probability weighted to determine the value for the Class B common stock. Significant unobservable inputs in the valuation include (i) probabilities of each scenario, (ii) timing of occurrence, (iii) future valuation; (iv) and the risk-adjusted discount rate.

The consolidated investment in Zylö was valued at $36,819 and $36,819 as of March 31, 2026 and December 31, 2025, respectively.

NOTE 6 – Prepaid Expenses and Other Assets

As of March 31, 2026 and December 31, 2025, prepaid expenses and other assets consisted of the following:

	As of March 31, 2026			As of December 31, 2025
Prepaid clinical trial expenses	$	1,147,830		$	987,605
Prepaid insurance		191,042			40,008
R&D credit receivable		7,590			11,707
Other prepaid expenses		106,307			26,648
Total		1,452,769			1,065,968
Prepaid expenses and other assets, current portion		(753,349	)		(366,548	)
Prepaid expenses and other assets, long-term portion	$	699,420		$	699,420

NOTE 7 – Stockholders’ Equity

Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock. This preferred stock may be issued in one or more series, and shall have such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions thereof as shall be determined at the time of issuance by the Company’s board of directors without further action by the Company’s shareholders. As of March 31, 2026 and December 31, 2025, 5,000,000 shares of the Company’s preferred stock have been designated as Series A Convertible Preferred Stock, 2,000,000 shares of the Company’s preferred stock have been designated as Series B Preferred Stock, and 3,000,000 shares of the Company’s preferred stock remain undesignated.

Series A Convertible Preferred Stock

The shares of Series A Convertible Preferred Stock, par value $0.0001 per share, are not mandatorily redeemable and do not embody an unconditional obligation to settle in a variable number of equity shares. As such, the shares of Series A Convertible Preferred Stock are classified as permanent equity on the condensed consolidated balance sheets. The holders’ contingent redemption right in the event of certain deemed liquidation events does not preclude permanent equity classification. Further, the shares of Series A Convertible Preferred Stock are considered an equity-like host for purposes of assessing embedded derivative features for potential bifurcation. The embedded conversion feature is considered to be clearly and closely related to the associated convertible preferred stock host instrument and therefore was not bifurcated from the equity host. As of March 31, 2026 and December 31, 2025, no shares of Series A Convertible Preferred Stock were issued and outstanding.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Series B Preferred Stock

On November 2, 2022, the Company filed a Certificate of Designation of the Series B Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada to create a new class of Series B Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”). The Certificate of Designation designated 2,000,000 shares of authorized preferred stock as Series B Preferred Stock. The Series B Preferred Stock was not entitled to receive dividends or any other distributions. The Series B Preferred Stock was entitled to ten votes per share and voted together with the Company’s issued and outstanding shares of common stock as a single class exclusively with respect to a proposal to increase the number of shares of common stock that the Company was authorized to issue, together with any ancillary or administrative matters necessary or advisable in connection with the implementation of such increase. The Series B Preferred Stock had no rights as to any distribution or assets of the Company upon liquidation, bankruptcy, reorganization, merger, acquisition, sale, dissolution or winding up of the Company. As of March 31, 2026 and December 31, 2025, no shares of Series B Preferred Stock were issued and outstanding.

Warrants

On March 27, 2024, as an inducement to exercise certain warrants, the Company issued new unregistered warrants to purchase up to 3,750,000 shares of the Company’s common stock at an exercise price of $1.50 per share (the “April 2024 Inducement Warrants”). On January 7, 2025, the Company issued 3,750,000 common shares in connection with the exercise of the 3,750,000 April 2024 Inducement Warrants for cash proceeds of $5,625,000.

A summary of warrant activity for the three months ended March 31, 2026 is as follows:

	Number of Warrants			Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2025		1,740,752		$	4.38	$	—		2.37
Expired		(56,932	)		56.25		—		—
Outstanding as of March 31, 2026		1,683,820			2.63		—		2.21
Warrants exercisable as of March 31, 2026		1,683,820		$	2.63	$	—		2.21

The Company has determined that the warrants should be accounted for as a component of stockholders’ equity.

Common Shares

2025

On January 7, 2025, the Company issued 3,750,000 common shares in connection with the exercise of the 3,750,000 April 2024 Inducement Warrants for cash proceeds of $5,625,000. See Warrants section above.

On January 13, 2025, the Company entered into a Patent Application Acquisition Agreement with the Seller, whereby the Seller sold, conveyed, assigned and transferred to the Company all of Seller’s right, title, and interest in and to certain patent applications and associated rights, subject to the terms and conditions set forth in such agreement for a cash payment of $400,000 and the issuance of 450,000 shares of the Company’s common stock. These common shares were valued at $850,500, or $1.89 per share, on the measurement date based on quoted closing price of the Company’s common stock (see Note 4).

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

On November 8, 2024, the Company entered into the ATM Agreement with Wainwright under which the Company could offer and sell shares of its common stock having an aggregate sales price of up to $2,700,000 through Wainwright as the sales agent pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from the Company (including any price, time or size limits or other parameters or conditions the Company may impose). The Company will pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $5,000,000 pursuant to a prospectus supplement dated February 7, 2025. On November 13, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $2,439,256 pursuant to a prospectus supplement dated November 13, 2025 for a current offering up to $4,821,200. On April 16, 2026, the amount that the Company could offer and sell pursuant to the ATM Agreement was updated pursuant to a prospectus supplement to a registration statement on Form S-3 (File No. 333-291566) dated April 16, 2026 for a current offering up to approximately $1,555,000. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,790,780 and (2) the termination of the ATM Agreement by either the Company or Wainwright, as set forth therein.

During the three months ended March 31, 2025, pursuant to the ATM Agreement, the Company issued an aggregate of 927,968 shares of its common stock for net proceeds of $1,441,964.

2026

During the three months ended March 31, 2026, pursuant to the ATM Agreement, the Company issued an aggregate of 756,187 shares of its common stock for net proceeds of $701,484.

2018 Equity Incentive Plan

On May 4, 2018, the Company’s board of directors adopted the Hoth Therapeutics, Inc. 2018 Equity Incentive Plan (the “2018 Plan”) initially reserving 40,000 shares of the Company’s common stock for issuance thereunder. The 2018 Plan became effective on May 14, 2018 upon written approval of the 2018 Plan by shareholders holding a majority of the Company’s voting capital. The 2018 Plan provides that on the first day of each fiscal year commencing on January 1, 2019, the share limit (as defined in the 2018 Plan) and the ISO Limit (as defined in the 2018 Plan) shall automatically be increased by that number of shares equal to the lowest of (i) 10,000 shares of common stock, (ii) 5% of the number of shares of the Company’s common stock outstanding as of such date and (iii) an amount determined by the compensation committee of the board of directors (the “Committee”).

The Committee increased the number of shares reserved pursuant to the 2018 Plan by 26,878 shares effective as of January 1, 2021, such that as of January 1, 2021, the Company had an aggregate of 66,878 shares of common stock reserved for issuance pursuant to the 2018 Plan. On June 24, 2021, at the annual meeting of shareholders, shareholders of the Company approved an amendment to the 2018 Plan to further increase the number of shares reserved for issuance thereunder from 66,878 shares to 146,878 shares. On February 2, 2022, the Committee further increased the number of shares reserved for issuance under the 2018 Plan from 146,878 shares to 156,878 shares. On January 11, 2023, the Committee further increased the number of shares reserved for issuance under the 2018 Plan from 156,878 shares to 166,878 shares. On January 4, 2024, the Committee further increased the number of shares reserved for issuance under the 2018 Plan from 166,878 shares to 176,878 shares. On January 6, 2025, the Committee further increased the number of shares reserved for issuance under the 2018 plan from 176,878 shares to 186,878 shares. On January 5, 2026, the Committee further increased the number of shares reserved for issuance under the 2018 plan from 186,878 shares to 196,878 shares. As of March 31, 2026, there were 10,738 shares of Company common stock available for grant under the 2018 Plan.

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

2022 Equity Incentive Plan

On March 24, 2022, the Company’s board of directors adopted the Hoth Therapeutics, Inc. 2022 Omnibus Equity Incentive Plan (the “2022 Plan”) initially reserving 96,000 shares of the Company’s common stock for issuance thereunder. The 2022 Plan became effective on June 23, 2022 upon approval of the 2022 Plan by the Company’s shareholders at the Company’s annual meeting of shareholders.

On June 2, 2023, the Company’s board of directors approved the Hoth Therapeutics, Inc. Amended and Restated 2022 Omnibus Equity Incentive Plan (the “Amended and Restated 2022 Plan”) which, among other things, increased the number of shares reserved under the plan by 495,317 shares, which Amended and Restated 2022 Plan was approved by stockholders on August 18, 2023.

On May 15, 2024, the Committee recommended, and the board of directors approved an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 500,000 shares from 591,317 shares to 1,091,317 shares (“2024 Increase”). The 2024 Increase was approved by shareholders of the Company on August 7, 2024.

On May 9, 2025, the Committee recommended, and the board of directors approved an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 2,000,000 shares from 1,091,317 shares to 3,091,317 shares (“2025 Increase”). The 2025 Increase was approved by shareholders of the Company on August 5, 2025.

On August 27, 2025, the Committee granted 800,000 shares of restricted stock with a cost basis of $1.21 per share, to the Company’s Chief Executive Officer. Such shares were fully vested on the grant date.

As of March 31, 2026, there were 1,201,317 shares of Company common stock available for grant under the Amended and Restated 2022 Plan.

On April 30, 2026, the Committee recommended, and the board of directors approved an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 3,250,000 shares from 3,091,317 shares to 6,341,317 shares (“2026 Increase”). The 2026 Increase remains subject to shareholder approval.

Stock Options

On January 14, 2025, pursuant to and subject to the available number of shares reserved under the 2018 Plan, the Company issued options to the Company’s Chief Executive Officer to purchase up to 93,000 shares of the Company’s common stock at an exercise price of $1.55 per share. Additionally, on January 14, 2025, pursuant to and subject to the available number of shares reserved under the Amended and Restated 2022 Plan, the Company issued options to the Company’s Chief Executive Officer and an employee to purchase up to an aggregate of 77,000 shares of the Company’s common stock at an exercise price of $1.55 per share. The options vested immediately in full upon grant and expire on January 14, 2035. The aggregate grant date fair value of these options was $219,929, which was recorded as stock-based compensation in January 2025.

The fair value of option grants was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	Three Months Ended March 31,
	2026		2025
Exercise price	$	-	$	1.55
Term (years)		-		5.0
Expected stock price volatility		-		118.32	%
Risk-free rate of interest		-		4.59	%

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

A summary of option activity under the Company’s equity incentive plans for the three months ended March 31, 2026 is presented below:

	Number of Shares		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2025		1,260,362	$	4.34	$	111,250		8.2
Employee options issued		—		—		—		—
Expired		—		—		—		—
Outstanding as of March 31, 2026		1,260,362	$	4.34	$	40,300		7.9
Options vested and exercisable as of March 31, 2026		1,260,362	$	4.34	$	40,300		7.9

A summary of stock options outstanding as of March 31, 2026 by price range is as follows:

	Options outstanding and exercisable
Range of Exercise Prices	Number of Shares		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price
Up to $2.59		1,183,000		8.0	$	1.24
$14.75 to $76.25		62,562		5.4	$	32.95
Above $76.25		14,800		3.7	$	131.50
Options outstanding and exercisable as of March 31, 2026		1,260,362		7.9	$	4.34

All stock compensation associated with the amortization of employee stock option expense was recorded as a component of general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

Estimated future stock-based compensation expense relating to unvested stock options is $0.

Stock-Based Compensation

Stock-based compensation expense for the three months ended March 31, 2026 and 2025 was as follows:

	Three Months Ended March 31,
	2026		2025
Employee stock option awards	$	-	$	219,929
	$	-	$	219,929

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

For the three months ended March 31, 2026 and 2025, the amount of stock-based compensation expense included within research and development and general and administrative expenses was as follows:

	Three Months Ended March 31,
	2026		2025
Research and development	$	-	$	-
General and administrative		-		219,929
	$	-	$	219,929

NOTE 8 – Commitments and Contingencies

Office Lease

Effective November 2023, the Company leased office space for a two-year term. The Company’s office lease contained a renewal option. The Company evaluated several factors in assessing whether there is reasonable certainty that the Company will exercise its contractual renewal option concluding that it is not reasonably certain to exercise such option. As it is not reasonably certain to be exercised, the Company excluded the renewal term in determining the lease term used in calculating the ROU asset and lease liability. On December 9, 2024, the Company and the landlord entered into a lease agreement (the “December 2024 Lease”). Pursuant to the December 2024 Lease, effective December 20, 2024, the Company leased office space for a term of 14 months, expiring on February 28, 2026. Pursuant to the December 2024 Lease, the Company paid a monthly base rent of $2,732 from March 1, 2025 through February 2026. Effective January 1, 2026, the Company entered into a second amendment to its lease agreement. Pursuant to the second amendment to the lease agreement, the Company renewed its lease for a one-year term expiring on December 31, 2026. Right-of-use assets and obligations for leases with an initial term of 12 months or less are considered short term and are (a) not recognized in the balance sheet and (b) recognized as an expense on a straight-line basis over the lease term.

The table below presents certain information related to the Company’s lease costs, which are included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operation and comprehensive loss:

	Three Months Ended March 31,
	2026		2025
Operating lease expense	$	4,652	$	7,415
Short-term lease expense		6,210		5,660
Total lease cost	$	10,862	$	13,075

Right-of-use asset for operating leases was recorded in the condensed consolidated balance sheets as follows:

	March 31, 2026		December 31, 2025
Office lease right-of-use asset	$	-	$	31,075
Less accumulated amortization		-		(26,423	)
Total right-of-use asset, net	$	-	$	4,652

HOTH THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

Operating lease liability for operating leases was recorded in the condensed consolidated balance sheets as follows:

	March 31, 2026		December 31, 2025
Current portion of operating lease liability	$	—	$	5,678
Long-term portion of operating lease liability		—		—
Total operating lease liability	$	—	$	5,678

Supplemental cash flow information related to the Company’s leases for the three months ended March 31, 2026 was as follows:

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases		$	5,678

NOTE 9 – Subsequent Events

The Company has evaluated subsequent events and transactions that occurred up to the date the unaudited condensed consolidated financial statements were issued. Based upon this review, except for as noted below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

On April 1, 2026, the Company entered into a Purchase Agreement with certain institutional investors, pursuant to which the Company agreed to sell to such investors 2,857,144 shares of common stock of the Company at a purchase price of $0.70 per share of common stock. For each share of common stock purchased by the investors, the Company, in a private placement pursuant to the Purchase Agreement, concurrently issued to such investors Warrants to purchase one share of common stock at an exercise price of $0.85 per share. The Warrants are exercisable six months from the date of issuance (the “Initial Exercise Date”) for a period of five years from the Initial Exercise Date. In connection with the offering, gross proceeds were approximately $2,000,000, and the Company received net proceeds of $1,611,879, after deducting placement agent’s fees and other offering expenses paid by the Company of $388,121. Additionally, in connection with the offering, the Company issued Placement Agent Warrants to the designees of the placement agent, Wainwright, to purchase up to 142,857 shares of common stock. The Placement Agent Warrants are immediately exercisable at an exercise price of $0.875 per share and expire on April 1, 2031.

On April 16, 2026, the Company filed a prospectus supplement to update the total offering available under the ATM Agreement to approximately $1,555,000.

On April 22, 2026, the Company formed a new wholly-owned subsidiary, Rocket One, Inc., which was incorporated under the laws of Nevada.

On April 30, 2026, the Company’s compensation committee recommended, and the board of directors approved an increase to the number of shares of common stock reserved for issuance under the Amended and Restated 2022 Plan by 3,250,000 shares from 3,091,317 shares to 6,341,317 shares (the “2026 Increase”). The 2026 Increase remains subject to shareholder approval.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as may be amended, supplemented or superseded from time to time by other reports we file with the SEC. All amounts in this report are in U.S. dollars, unless otherwise noted.

We are a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. We are focused on developing (i) a topical formulation for treating side effects from drugs used for the treatment of cancer (HT-001); (ii) a treatment for mast-cell derived cancers and anaphylaxis (HT-KIT); and (iii) a treatment and/or prevention for Alzheimer’s or other neuroinflammatory diseases (HT-ALZ). We also have assets being developed for (i) atopic dermatitis (also known as eczema) (BioLexa); (ii) a treatment for asthma and allergies using inhalational administration (HT-004); and (iii) a treatment for obesity, and obesity-related diseases and conditions (HT-VA).

Recent Developments

On April 1, 2026, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to sell to such investors 2,857,144 shares of common stock of the Company at a purchase price of $0.70 per share of common stock. For each share of common stock purchased by the investors, the Company, in a private placement pursuant to the Purchase Agreement, concurrently issued to such investors an unregistered warrant (each a “Warrant” and, collectively, the “Warrants”) to purchase one share of common stock at an exercise price of $0.85 per share. The Warrants are exercisable six months from the date of issuance (the “Initial Exercise Date”) for a period of five-years from the Initial Exercise Date. In connection with the offering, gross proceeds were approximately $2,000,000, and the Company received net proceeds of $1,611,879, after deducting placement agent’s fees and other offering expenses paid by the Company of $388,121. Additionally, in connection with the offering, the Company issued placement agent warrants to the designees of the placement agent, Wainwright, to purchase up to 142,857 shares of common stock (the “Placement Agent Warrants”). The Placement Agent Warrants are immediately exercisable at an exercise price of $0.875 per share and expire on April 1, 2031.

Results of Operations

Comparison of Our Results of Operations for the Three Months Ended March 31, 2026 and 2025

Operating Costs and Expenses

Research and Development Expenses

For the three months ended March 31, 2026, research and development expenses were approximately $1,519,000. Specifically, during the three months ended March 31, 2026, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $1,431,000 related to manufacturing and clinical activities; (ii) HT-KIT, approximately $12,000 related to manufacturing and preclinical activities; and (iii) HT-VA approximately $45,000 related to preclinical studies. In addition to the foregoing, we also incurred fees of approximately $31,000 payable to members of our scientific advisory board for services.

For the three months ended March 31, 2025, research and development expenses were approximately $1,959,000. Specifically, during the three months ended March 31, 2025, our research and development costs consisted primarily of the following costs for each of our key research and development projects: (i) HT-001, approximately $459,000 related to manufacturing and clinical activities; (ii) HT-KIT, approximately $198,000 related to manufacturing and preclinical activities; and (iii) HT-ALZ, approximately $12,000 related to preclinical studies. In addition to the foregoing, we also incurred fees of approximately $37,000 payable to members of our scientific advisory board for services and recorded approximately $1,253,000 of in-process research and development expenses in connection with the acquisition of patent applications.

We expect our research and development activities to continue to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increasing costs associated with the following:

●

employee-related expenses, which include salaries and benefits, and rent expenses;

●

fees related to in-licensed products and technology;

●

expenses incurred under agreements with CROs, investigative sites and consultants that conduct our clinical trials and a substantial portion of our pre-clinical activities;

●

the cost of acquiring and manufacturing clinical trial materials; and

●

costs associated with non-clinical activities and regulatory approvals.

General and Administrative Expenses

For the three months ended March 31, 2026, general and administrative expenses amounted to approximately $1,129,000 as compared to $1,517,000 for the three months ended March 31, 2025, a decrease of $388,000, or 25.6%. For the three months ended March 31, 2026 and 2025, general and administrative expenses consisted of the following (rounded to the nearest $1,000):

	Three Months Ended March 31,
	2026		2025
Compensation and related expenses	$	394,000	$	650,000
Professional and consulting expenses		552,000		670,000
Rent expense		10,000		13,000
Other general and administrative expenses		173,000		184,000
Total	$	1,129,000	$	1,517,000

During the three months ended March 31, 2026, the decrease in general and administrative expenses of approximately $388,000 was primarily attributed to (1) a decrease in compensation and related expenses of $256,000, primarily attributable to a decrease in stock-based compensation of approximately $220,000 in connection with the issuance of stock options during the three months ended March 31, 2025 as compared none during the three months ended March 31, 2026, and a decrease in other compensation and related expenses of $33,000, (2) during the three months ended March 31, 2026, professional and consulting expenses decreased by approximately $118,000 which was primarily attributable to a decrease in legal and consulting fees of approximately $48,000 and a decrease in accounting fees of approximately $76,000, offset by an increase in directors’ fees of approximately $6,000, (3) a decrease in rent expense of $3,000, and (4) a decrease in other general and administrative expenses of $11,000.

We anticipate that our general and administrative expenses will continue to increase in future periods, reflecting continued and increasing costs associated with:

●

support for our research and development activities;

●

stock compensation granted to key employees and non-employees;

●

support of business development activities; and

●

increased professional fees and other costs associated with regulatory requirements that we are subject to.

Other Income (Expenses), net

For the three months ended March 31, 2026, other expense, net was approximately $44,000, which resulted from the recording of a realized loss of crypto assets of $44,000.

For the three months ended March 31, 2025, other income, net was approximately $181, which resulted from interest income.

Net Loss

For the three months ended March 31, 2026 and 2025, we incurred a net loss of approximately $2,692,000, or $0.17 per common share (basic and diluted), and $3,476,000, or $0.27 per common share (basic and diluted), respectively.

Liquidity and Capital Resources

Our unaudited condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. Our ability to continue as a going concern is dependent on our ability to raise additional capital to fund our research and development (“R&D”) activities and meet our obligations on a timely basis. To date we have funded our operations primarily through the sale of equity and debt securities. As of March 31, 2026, we had approximately $4,047,000 in cash and cash equivalents, working capital of approximately $3,425,000 and an accumulated deficit of approximately $75,572,000. Net cash used in operating activities was $3,050,000 and $2,788,000 for the three months ended March 31, 2026 and 2025, respectively. We incurred net losses of approximately $2,692,000 and $3,476,000 for the three months ended March, 2026 and 2025, respectively. We have incurred substantial operating losses since inception and expect to continue to incur significant operating losses for the foreseeable future as we continue our pre-clinical and clinical development of our product candidates. We have not yet commercialized any products and have never generated any revenue from product sales. We do not believe that our existing cash as of March 31, 2026 will enable us to fund our operating expenses and capital expenditure requirements for at least 12 months from the date that our unaudited condensed consolidated financial statements are available to be issued. If funding is not available, or not available on terms acceptable to the Company, our current development plan and plans for expansion of our general and administrative infrastructure may be curtailed. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these consolidated financial statements are issued. Our unaudited condensed consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern.

On November 8, 2024, we entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”) under which we could offer and sell shares of our common stock having an aggregate sales price of up to $2,700,000 through Wainwright as the sales manager pursuant to our effective shelf registration statement on Form S-3 (File No. 333-272620), including an accompanying base prospectus and a prospectus supplement dated November 8, 2024. Sales of shares of the Company’s common stock through Wainwright, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act. Wainwright will use commercially reasonable efforts to sell shares of the Company’s common stock from time to time, based on instructions from us (including any price, time or size limits or other parameters or conditions we may impose). We will pay Wainwright a commission equal to 3.0% of the aggregate gross proceeds from the sales of shares of the Company’s common stock sold through Wainwright under the ATM Agreement and will also reimburse Wainwright for certain specified expenses in connection with the ATM Agreement. On February 7, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $5,000,000 pursuant to a prospectus supplement dated February 7, 2025. On November 13, 2025, the amount that the Company could offer and sell pursuant to the ATM Agreement was increased by $2,439,256 pursuant to a prospectus supplement dated November 13, 2025 for a current offering up to $4,821,200. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,790,780 and (2) the termination of the ATM Agreement by either us or Wainwright, as set forth therein. During the three months ended March 31, 2026, we issued an aggregate of 756,187 shares of our common stock for net proceeds of approximately $701,000, after deducting sales agent commissions and other offering expenses payable by us pursuant to the ATM Agreement. On April 16, 2026, the amount that the Company could offer and sell pursuant to the ATM Agreement was updated pursuant to a prospectus supplement to a registration statement on Form S-3 (File No. 333-291566) dated April 16, 2026 for a current offering up to approximately $1,555,000. The offering of shares pursuant to the ATM Agreement will terminate on the earlier of (1) the sale, pursuant to the ATM Agreement, of shares having an aggregate offering price of $7,790,780 and (2) the termination of the ATM Agreement by either the Company or Wainwright, as set forth therein.

We have entered into certain license, sublicense, sponsored research and option agreements with third parties. Pursuant to such agreements, we may be required to make certain: (i) license maintenance fee payments; (ii) out-of-pocket expense payments, including, but not limited to, payments related to intellectual property and research related expenses; (iii) development and commercialization expense payments; (iv) annual and quarterly minimum payments; (v) diligence expense payments; and (vi) revenue interest payments. In addition, subject to the achievement of certain development and/or commercialization events, we may also be required to make certain: (i) minimum royalty payments, ranging from middle to high five figures, (ii) sales-based royalties and running royalties, ranging from low single digits to low double digits; and (iii) milestone payments, of up to approximately $25 million (if all milestones in all of our current agreements are achieved).

Additional funding will be necessary to fund our future clinical and pre-clinical activities. We may obtain additional financing through sales of our equity and debt securities or entering into strategic partnership arrangements, or a combination of the foregoing. There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all, particularly in light of the economic downturn. If we are unable to secure adequate additional funding as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates.

Cash Flows from Operating Activities

For the three months ended March 31, 2026, net cash used in operating activities was approximately $3,050,000, which primarily resulted from a net loss of approximately $2,692,000, an increase in prepaid expenses and other current assets of approximately $387,000 a decrease in accounts payable and accrued expenses of approximately $14,000, and a decrease in lease costs of $1,000, offset by approximately $44,000 of realized loss on crypto assets.

For the three months ended March 31, 2025, net cash used in operating activities was approximately $2,788,000, which primarily resulted from a net loss of approximately $3,476,000, offset by approximately $851,000 of non-cash research and development-acquired patent, $220,000 in stock-based compensation and a lease costs of $4,000, an increase in prepaid expenses and other current assets of $371,000 and a decrease in accounts payable and accrued expenses of $16,000.

Cash Flows from Investing Activities

During the three months ended March 31, 2026, the Company received proceeds of $147,000 from the sale of crypto assets.

The Company did not have any cash flows from investing activities for the three months ended March 31, 2025.

Cash Flows from Financing Activities

For the three months ended March 31, 2026, net cash provided by financing activities was approximately $701,000, which resulted from net proceeds from the issuance of common stock of approximately $701,000.

For the three months ended March 31, 2025, net cash provided by financing activities was approximately $7,067,000, which resulted from net proceeds from the issuance of common stock of $1,442,000 and proceeds from the exercise of warrants of approximately $5,625,000.

Our ultimate success is dependent on our ability to obtain additional financing and generate sufficient cash flow to meet our obligations on a timely basis. We will require significant amounts of capital to sustain operations, and we will need to make the investments we need to execute our longer-term business plan to support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution of our long-term business plan, we will need to obtain debt or equity financing, especially if we experience downturns in our business that are more severe or longer than anticipated, or if we experience significant increases in expense levels resulting from being a publicly traded company or from operations. Such additional debt or equity financing may not be available to us on favorable terms, if at all.

We plan to pursue our plans with respect to the research and development of our pre-clinical products which will require resources beyond those that we currently have, ultimately requiring additional capital from third-party sources. We currently do not expect to generate any revenue.

Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:

●

it requires assumptions to be made that were uncertain at the time the estimate was made; and

●

changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material.

See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for an additional discussion of our significant accounting policies.

Stock-based compensation

Expected Volatility - The Company computes stock price volatility over expected terms based on its historical common stock trading prices.

Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term.

Recently Issued Accounting Standards Not Yet Effective or Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements, to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 and early adoption is permitted. The amendments in ASU 2025-11 can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the disclosure impact that ASU 2025-11 may have on its financial statement presentation and disclosures.

The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026, the end of the period covered by this Quarterly Report on Form 10-Q. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.

ITEM 1A. RISK FACTORS

Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 27, 2026 (“Annual Report”), as subsequently updated, amended or superseded by our other filings made with the SEC. There have been no material changes in our risk factors from those previously disclosed in our Annual Report and other filings made with the SEC. You should carefully consider the risks in our filings with the SEC which could materially affect our business, financial condition or future results. The risks in our SEC filings are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

During the fiscal quarter ended March 31, 2026, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

ITEM 6. EXHIBITS

Exhibit No.		Description
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 is formatted in Inline XBRL

*	Filed herewith.

**	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HOTH THERAPEUTICS, INC.

Date: May 15, 2026	By:	/s/ Robb Knie
		Robb Knie,
		Chief Executive Officer
		(Principal Executive Officer)

Date: May 15, 2026	By:	/s/ David Briones
		David Briones,
		Chief Financial Officer
		(Principal Financial and Accounting Officer)